Subprime mortgages have caused needless heartache for many homeowners because they were not implemented properly or they were abused. It all seems like a crazy mess. Given the state of the real estate market for millions of Americans just a few years ago (and still being strongly felt today), it is not hard to see some skepticism. So, what is all this craziness? How can aspiring homeowners get a grip on an industry that seems too busy for its own good?
The Sub-Prime System
Firstly, this article can’t solve everything. But, it can offer just a splash of insight into direct lending and sub-primes. The sub-prime mortgage market is essentially a scaled system that looks at borrower’s credit. Why it was such a problem in the past was that it allowed virtually anyone to get a loan (this is the essence of it). The system scaled itself out of relevance in 2009. In 2017, sub-prime mortgages are mortgages appropriated to credit history and borrowing history based on bankruptcy, credit score, etc.
Direct lenders are companies that avoid a lot of the bank-related red tape. To get a mortgage, most people go through a bank that uses this sub-prime format. But, their credit does not fit because the subprime mortgage industry has tightened up.
Instead of opting to never own a house, they have an alternative choice- a direct lender. A sub-prime lender has many financial sources and channels that a borrower may contend with. When borrowers work with a direct lender, they only have one- the lender. It is a way for them to connect directly to the financial source without the burdensome red tape that is often present in the subprime system.
For more information on direct lending, see Dustin Dimisa on Twitter. He writes about this constantly and has developed a spectacular program called Consumer Connect. Clients can receive direct loans from direct lenders with full transparency. They can avoid a lot of the large and encompassing aspects of mortgage lending that can weigh down owning a home. With Consumer Connect, it is possible for people to realize their dream of home ownership with as little complex and needless red tape as possible.